Following is the unofficial transcript of a CNBC interview with West Virginia Senator Joe Manchin on CNBC’s “Closing Bell” (M-F, 3PM-4PM ET) today, Tuesday, August 2nd. Following is a link to video on CNBC.com:
Sen. Joe Manchin On Inflation Reduction Act: This is an American Bill
SARA EISEN: And joining us now is Senator Joe Manchin of West Virginia. Senator Manchin, welcome to the show. Good to have you.
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SENATOR JOE MANCHIN: Good to be with you, Sara. Thank you for having me.
EISEN: So you told my colleague at MSNBC earlier that you had planned to speak with Senator Sinema this afternoon about the bill. Have you done that yet?
EISEN: And what can you tell us?
MANCHIN: We had a good conversation.
EISEN: Is she supportive?
MANCHIN: We had a good conversation, Sara. I'm not gonna say any more than that because, you know, she's, she does her own homework and she looks at the bill and looks at the content and she'll make her decision and give a reason for making her decision, I'm sure. But with that, you know, we talked about just an array of different things and and we'll leave it at that.
EISEN: What, did you talk about carried interest because I know I knew that she was on board in December about a lot of things but that this provision wasn't in that bill.
MANCHIN: We just had a good conversation. We're gonna give her some information that we have and we’ll share information back and forth, which is how we operate and it works out well in the end.
EISEN: Alright, let me ask it one more different way, which is, if carried interest does prove to be a sticking point for her, would you be willing to negotiate on that point and what would that look like?
MANCHIN: We've really had a good conversation, Sara, and I'm not saying anything else. I know you're trying and you're doing your you're doing a great job but—
EISEN: Well, it’s the key question.
MANCHIN: It's just it's, yeah. Well, it's a very delicate question too and you’ll have to talk about all that but, you know, we're just looking in exchanging ideas and exchanging different information we have of why each other's position that's all we've always done that so we're not doing anything different we haven't done before.
EISEN: Okay, so let's talk about the bill and inflation, which we talk about—
MANCHIN: Yeah now we're talking.
EISEN: A lot here on CNBC. So you bill it as an Inflation Reduction Act, but some of the early studies coming out, Senator, are saying that it does nothing to fight inflation, especially in the near term. So isn't that a bit misleading of a title?
MANCHIN: Well, it's a bit misleading for those who come out and said that because there's been so many others have looked at it so favorably. Sara, I think just the common sense, I know I've been involved with 17 Nobel laureates telling me back in March, almost over a year ago, that inflation will be transitory. And the figures I saw and everything I was evaluating said it would not be. It'd be very detrimental and harming to our economy and to the people of America and harmful to West Virginia. And guess what, that's what turned out to be. So I know different people have different opinions. Sara, what we're doing, we're basically paying down debt. We're fighting inflation by putting more production out and energy, produce more, produce more oil and gas and making sure that our fossil industry can carry the load. We're making investments for more jobs, more energy, more jobs here in America with clean energy. So we're basically taking care of the needs of energy now, and basically investing for the energy for the future and we're doing all that while we're reducing the amount of inflation within our prices for gas because I think all of us will agree the supply and demand, the more supply you have, the better chance you have of driving down the price. And that's going to be for gasoline that's going to be for your home heating and air conditioning, everything else you're using. So we're doing tha.t We're also paying down, reducing all the drug prices. So you think that millions of people across America will be paying lower drug prices because of Medicare being able to negotiate. That's a tremendous factor. They're not factoring any of these things in. All they're taking is that companies who haven't paid for whatever reason they haven't paid will be paying 15% minimum. Sara, the only thing I've said the corporate rate was at 35% before and that was way too high. There was a bipartisan group of us in 2017 thought it would be reduced to 25. It went clear to 21. That was a 14% reduction. That was great and people were tickled to death but I guess it's not enough and all we're saying is companies who aren't paying or paying very low, if any at all, and there's 55 of the largest corporations, this only affects Sara companies that have a billion dollars of revenue or greater annually are even going to be evaluated this way to pay a 15% minimum and I just can't believe that these patriotic companies don't want to help this country defend itself and be able to do what we need to do to be the superpower of the world.
EISEN: Now JCT found that 50% of those companies would be America's manufacturing companies at a time where Senator Manchin, we're trying to re-sure American manufacturing, aren't we?
MANCHIN: Right. Well we’re putting an awful lot—
EISEN: So doesn’t that hurt their hiring and investing decisions?
MANCHIN: Well, let me if you thought it was going to hurt, don't you think the last two years it would have you've seen record capital investments, and you've seen the least amount of capital investments with record profits. So the only thing we're saying is the thing they tell me most is reliability, making sure this government will then do their job permitting regulations and that's what we're going to basically accelerate and streamline to where people can, you know, we can do things and build things much quicker than we ever have in the past. That's all part of this package. So it's going to be wonderful from that end of it.
EISEN: Well the National Association of Manufacturers disagree. They say that the tax the tax in 2023 alone will reduce GDP by $68.5 billion, cut labor income by $17.1 billion. That's problematic.
MANCHIN: I've heard also, I've heard also that the CDC you've heard about that that the joint tax, I’m sorry the JCT, the Joint Committee on Taxation, you heard that they said it was going to cause the people paying taxes that made $200,000 which is absolutely totally a lie. That's not the fact. What they're not telling you Sara is that that only came out from one half of the Republican side. You know, the Joint Tax Committee, the committee on taxes, basically has two sides. You have a Republican side, Democrat side, they work together. When they have a joint statement, it’s basically by both sides. This only came from one side so a lot of this is being skewed right now. We are for the first time, we're paying down our debt $300 billion, haven't done that in 25 years, not in 25 years we're paying down debt. Okay, we're increasing production of the energy—
EISEN: But that doesn’t come for 5 years. Sorry to cut you off Senator Manchin but if that if that is the reason this is disinflationary that, the deficit reduction doesn't happen for five years. That doesn’t do anything about inflation now.
MANCHIN: Sara, I’m just saying. When is the last time Sara you saw the intent of us paying down anything in this. We’re 30.5, 3.5 trillion dollars—
EISEN: For sure, I’m just going back to the inflation question.
MANCHIN: Okay, how about, let me ask you this then. How about production, don't you think you've got to produce your way out of this work your way out of inflation? You can't just sit back and wait for it and let the Feds basically raise the rate until you quit buying anything. I think think differently. I think production is the way to go. And on top of that, we're accelerating permitting, which is what every one of my Republican friends have said we've got to do to get America back. And then the investments we're making on the renewable side and all the new technology is going to be production tax credits and investment tax credits. So let me give you an example. We have a coal fired plant in West Virginia that’s going to be closing down in two years. It's a 1300 megawatt. Okay, there's a couple 100 jobs that work there. We have a company now looking at buying it and turning it into green energy, hydrogen, so making basically green ammonia to be shipped anywhere in the country of the world. There are some other opportunities if we just keep our minds open and work together. This is an American bill. It's not a Republican bill, it’s not a Democrat bill. It's not a green bill. It's a red, white and blue bill. And for God's sake, can't we come together and do something that's great for our country and—
EISEN: It is a Democrat bill if it's only voted on by, by Democrats. Right? You’re doing this through reconciliation.
MANCHIN: It’s a process we have. Sara, the things, the things we have in this bill are things that my Republican colleagues have talked to me for the last year. They were tickled to death for the three and a half trillion-dollar spending bill, a bill back better I was totally opposed to it. Totally opposed, never could get on. I was the only one couldn't get on board. Okay. And then all this goes on and I started talking again. I'm trying to look and see if there's a pathway for. I'm sick and tired of us running around the world, asking people to do what we haven't done for ourselves produce more energy, and they produce it in a much more climate harming way. So there's so much we can do. Decarbonization works ina couple of ways. If the United States of America produces more and we drill more and we produce more and we do it cleaner and we replace the dirtier, the dirtier product around the world, then we're decarbonizing. But then if you look at the geopolitical unrest that we have, and what Russia is doing to Europe right now by screwing down the lid so tight, they're going to basically have to make some decisions they go back to Russia for their cheap dirty energy check or can we help offset that. That's what we got to do.
EISEN: What about this sort of side deal bill for the $6.6 billion pipeline, natural gas pipeline that would one run through West Virginia? What, are you confident that you can get the votes for that to become law?
MANCHIN: It's the only piece of legislation that we have that basically puts energy and production within six months, 2 billion cubic feet a day. Do you know what that does? It’s unbelievable, and it goes down through Virginia to North Carolina, it gets in the system and goes to the southwest. It basically gives us a chance to reduce the natural gas prices in America because we're putting production into the market. We're not waiting five or 10 years, 94% of that has already been built. It's been built, put in the ground, covered up, receded, gone. And all we're saying is finish that like the national production. Okay, we need a defense production act. We need energy right now to get ourselves out of this mess and the only way you can get energy is by build and production.
EISEN: Is there a path toward this happening? Because you would need ten Democrats, assuming all Republicans vote yes on it.
MANCHIN: Sure. Oh, absolutely. This is a path. It's a basically a product that we're putting together all as one – that one has to be voted on separately because it doesn't fit in to the reconciliation. And we have agreements from the President, we have agreements from Chuck Schumer, we have agreements from Nancy Pelosi. That's all been worked together in that understanding, and they need it basically for renewables. You can't build transmission lines, taking them to where the wind projects may be, or solar projects, these large projects, unless we can get basically fast permitting and regulations so we can get this stuff done. You can't bring it to market unless you can finish it.
EISEN: So you've got guarantees on that. Just back to the Inflation Reduction Act. You mentioned, Senator Manchin, the drug pricing. And so for a long time, the pharmaceutical industry has been fighting this but it looks like included in this bill, Medicare, the federal government will be able to negotiate prices. And sure we all want to pay less for prescription drugs, but we also want key innovations and new blockbusters in fighting cancer and heart disease and all these issues which the industry says it will prevent because it totally changes the economics for them.
MANCHIN: Well, let's use some comparisons here. The largest provider of health care in America is the VA. Okay? The largest provider is the VA. So with them being the largest provider, they have been negotiating for the lowest drug prices for many, many years. Way before Medicare Part D came into play and the George W. Bush allowed PBMs and all of them to come into play. So that has not stymied at all any innovation or creation. Medicaid has been negotiating for prices. Why should Medicare – why is not – for some reason Medicare not allowed to enjoy the same low prices? Why can't we put caps on insulin – life-saving insulin? Why can't we do some of the things that we've been allowing other agencies to do? That's all we've asked for. And that's something we've all agreed on. I think 80% of Americans agree that should be done and we're – that's in this bill.
EISEN: I think they would argue though, it makes the economics less predictable and makes it even riskier to go into high risk areas of research and development around the healthcare side.
MANCHIN: Those drugs were never touched. Those drugs they're talking about, which are on the board right now just came into being and still don't – and they still have the protection of exclusivity. Those drugs aren't being touched at all, Sara. It's only the ten most drugs that have gone and it's just unbelievable how they distorted this.
EISEN: Well, they think it'll expand – the ten and I think there's room for expansion into 20. But the bottom line, Senator Manchin –
MANCHIN: It won’t expand unless we have legislation.
EISEN: Why are you putting this in this bill? Drug prices – I went back and looked at the CPI report in June, 2.5% higher than they were last year. This is not what is hurting Americans. At least it's not the primary driver of higher prices right now.
MANCHIN: 80% of Americans – Democrat and Republican – we're here representing our constituents. I can tell you my constituents in West Virginia want to be able to get lower drug prices than through Medicare and life-saving insulin they need, okay? They want caps on that. It's ridiculous. And 80% of Americans across this great nation, Democrats and Republicans alike, overwhelmingly, please reduce the prices of drug. This is a start. And if they think this is gonna basically disassemble the whole pharmaceutical and big pharma, I'm sorry, that's not going to happen. That's not the intent.
EISEN: I think they just think it's harder. It's not the primary driver of inflation. You've been critical Senator Manchin, of the Federal Reserve in the past for being late and slow when it comes to the inflation fight.
EISEN: Do you think they're doing a good job now?
MANCHIN: Well, they're coming on now. They're doing their job now. It took them a little while to get kicked in, but they're doing their job. Let's just see what happens. But we can do an awful lot more basically by producing. Taking the chains off of production for energy. Let our oil companies do what they do. Let our natural gas companies – let's build some pipelines. Let's get some things done here. And I'll guarantee it will drive down prices. You know, they're just trying to basically stop everything or basically tap things down by putting higher interest rates so it takes the desire from people wanting to buy. I want people to consume, I want them to be in the marketplace. I want them to have good opportunities. But I want them also to have an affordable energy price. Inflation is killing us. It will not let up. it's harming West Virginians, and it is harming everybody in America, I can assure you.
EISEN: Who owns that? Who should get the blame for that? Fed? The Biden administration? Congress? You guys passed $2 trillion of spending at a time where America was reopening.
MANCHIN: Sara, that's not my job here to blame people. You want to blame people, you’ll never get anything accomplished. I'm here to get things done. My Republican friends are upset right now for whatever reason, I don't know. These are still my friends. They will always be my friends. And we work very well together. We did three things they told me to do. They've always said, can we produce more? Absolutely. Can we pay down debt? Absolutely. Can we streamline the permitting process? Absolutely. And in normal time that wasn't this toxic, because people hate each other so bad. I love them all. These are my Democrats and Republicans. This is not their bill. This is an American bill. Let the American people have a win. One time let them have a win.
EISEN: What about China? In the news today, clearly with House Speaker Nancy Pelosi and Taiwan. China threatened serious consequences. Is it a mistake that she went?
MANCHIN: Not at all. No, I think Nancy Pelosi did the right thing.
EISEN: You support it?
MANCHIN: Basically, we've all been there. We've all – I support it 1,000%. We've all been there. You can't let someone say you can't come to this country. They've been a major trading partner of ours. We've had great relationships. They embrace democracy and the freedoms of democracy. My goodness, and we are afraid to stop and say how are you doing? Are we doing okay? Can we work better together? Is there anything else we can do? And we rely on them a good bit as you know, on our chips. Now we're going to be able to have a robust chip industry. And I was basically very leery about electric vehicles because we were changing our transportation mode, Sara, and basically being told with a foreign supply chain, depending on China for the batteries, and I said that's wrong. So if you want discounts on cars made in America, that battery better be made in America, too. And that takes away from China also the dependency we have. So we have to be self reliant also. I respect China for who they are and what they've done. I don't agree with them, but they've been very aggressive. We're gonna get aggressive now. And we're aggressive in chips and we’ll be aggressive in batteries and we’re aggressive in producing our own energy here in America.
EISEN: Senator Joe Manchin, thank you so much for the time today, sir.
MANCHIN: Thank you, Sara. Appreciate it. Always.